If you're going to flip, it could work, but you would need to analyze the properly for that approach -- which would included getting detailed and accurate estimate on repair costs. 

One strategy I've used is offer a higher price and ask for closing credits to buy down the loan and negotiate once it's in contract for credits on repairs. 

Under Servicemembers Civil Relief Act (SCRA), the following are considered “uniformed members:” Armed servicesActivated National GuardCommissioned Corps of the Public Health ServiceCommissioned Corps of the National Oceanic and Atmospheric AdministrationTo terminate the lease agreement, the tenant must meet the following conditions:Tenant joins the military after signing the lease agreement or signed the lease agreement while in the military then ordered to permanently change location or deploy for more than 90 days;Tenant provides landlord written notice; andTenant provides landlord copy of the military ordering him/her for a permanent change of station or deployment for a period of 90 days or more.Landlord fails to perform its dutiesFailure to do repairsTexas law mandates residential landlords to make a diligent effort in repairing property problems that materially affect the physical health or safety of an ordinary tenant.

It is a good idea as you can reduce repairs/maintenance and cap ex for the first couple of years.

In Houston, I've seen wholesale property going for 80%-repairs.

Some forums suggest to invest in states where i have friends or family... which is only Georgia or Louisiana but seems almost impossible to find a decent duplex within the range of 85-$110k in those states without having to invest in major repair. 

Reduce that $20k by repairs, cash for keys, and other things that will come up.

For a buy-and-hold strategy, make necessary repairs and updates and either renegotiate rent with current tenants or find new ones.No T12, as this was left to the current owner by his brother, who passed away."

I feel stupid for not realizing this in the first place, because if I did the 70% rule correctly, we would have to be *negative* $2,500 in repair costs to make it fit.Am I missing something here? 

They owe back taxes(3500) and I'm sure they do not have the funds to make repairs.